Being denied employment because of a credit check :(

[Dunno?]

Hi, I graduated last year..In order to get the job, they told me that they have to run a credit check on me..I know that I owe a lot of money to creditors but what my potential employer does not know is that I have a bank account with a lot of savings..The way I manage money is that I dont pay off my creditors all at once..I just pay off the minimum amount every month and save money..It is like paying off a home where people have savings but they just dont pay off the home all at once..My credit rating is excellent..I am at 780..I pay 6% interest on my credit cards..

My potential employer thinks I making too little to support myself so I got denied the job....And also my potential employer does not know that I am living with my mom now and she lets me live there for free..

Now, this credit checking thing to get hired,is kind of bad, if they dont have the whole picture!

[Freedom42]

Hi, I graduated last year..In order to get the job, they told me that they have to run a credit check on me..I know that I owe a lot of money to creditors but what my potential employer does not know is that I have a bank account with a lot of savings..The way I manage money is that I dont pay off my creditors all at once..I just pay off the minimum amount every month and save money..It is like paying off a home where people have savings but they just dont pay off the home all at once..My credit rating is excellent..I am at 780..I pay 6% interest on my credit cards..

My potential employer thinks I making too little to support myself so I got denied the job....And also my potential employer does not know that I am living with my mom now and she lets me live there for free..

Now, this credit checking thing to get hired,is kind of bad, if they dont have the whole picture!

Did your potential employer explicitly tell you that the financial details of your credit report cost you the job? From what I've read, most employers are more likely to use your credit report to confirm your Social Security number and your employment history. If you've applied for a loan or a credit card, all of that employment information is on your credit report, saving the potential employer time and money. In some cases, credit reports are used to assess whether someone is a security risk -- someone who's likely to steal from the company. Maybe your situation is different.

That said, I'd urge you to take the previous poster's advice to get a book by Suze Orman. By paying the minimum on your credit cards every month, you are not saving money -- you are only paying the interest on the credit card, and therefore everything you've charged to that card costs much more than the actual price tag. When you only pay off the minimum, you are not paying down the principal, only paying the interest over and over again. And that's exactly what the credit card company wants you to do, whether your interest rate is at 6 percent or 18 percent. The interest rate on your savings account would have to be significantly higher than the rate on your credit card in order for your scheme to work. Given what banks are paying these days, I doubt that's the case.

Your credit rating is excellent because you never miss a payment -- and by that, I mean an interest payment, because you're not paying off any principal. If you continue this pattern, you'll be seriously hurt in the long run. When you go to a bank to apply for a loan for a house or a car, it doesn't matter how much money you already have in savings. What matters is how much potential debt you can accrue. The lender will count all those credit cards, see how much debt you have outstanding and how much more you could incur -- and then you'll really be in a pickle. Either you won't get a loan or you won't get the best rate available, and that'll really cost you.

[Mommy TeleRN, RN]

all financial advice aside - this situation STILL makes no sense. OP does not have bad credit. This IS for a hospital job right? You aren't a nursing student wanting a bank job or something?

Geez - most hospitals I think would like the idea you need some $ to pay bills. Hey more OT you are willing to work! :chuckle

Edited to add: perhaps this thread is really the answer and the hospital pulled at straws for a denial of employment https://allnurses.com/forums/f8/terminated-last-2-jobs-what-should-i-do-238991.html

[buildingmyfaith57]

i can understand back ground check for employment. but employer checking your credit rating is none of their business, i don't know why the government allow this to happen? i had employer that did that to me and they told me that they don't check you credit ratings b.s. they did and they put their name on my credit report i dispite it. like i said its none of those companies business.

[CritterLover, BSN, RN]

i can understand back ground check for employment. but employer checking your credit rating is none of their business, i don't know why the government allow this to happen? i had employer that did that to me and they told me that they don't check you credit ratings b.s. they did and they put their name on my credit report i dispite it. like i said its none of those companies business.

while this reasoning might be sound for most nursing jobs, checking credit is standard for most jobs, esp those that involve cash-handeling.

to illustrate the point: a registration clerk recently got busted for embezzeling a whole bunch of money for the hospital she worked for.

i have also known of employees that didn't have direct cash-handeling responsibilities get caught in some illegal, job-driven "get rich quick" schemes. (can't get more specific).

even when my bother-in-law applied for a job with disney (and they offered him the job; he declined because they didn't want to live in central florida), they checked his credit. it was not a job that involved handeling cash, or any kind of investments. it was a creative-type job.

it really is a standard check in most empolyment settings. kind of like a drug screen is standard in most health-related (and some other) occupations.

however, i, too am confused as to why the op was declined a job based off this.

i can see being declined a mortgage (due to income to debt ratio), but it really shouldn't be a big deal for a hospital employer.

did this job have direct cash-handeling responsibilities? (some nurisng postions do -- say, collecting copays). if it did, then it might make some sense.

[buildingmyfaith57]

while this reasoning might be sound for most nursing jobs, checking credit is standard for most jobs, esp those that involve cash-handeling.

to illustrate the point: a registration clerk recently got busted for embezzeling a whole bunch of money for the hospital she worked for.

i have also known of employees that didn't have direct cash-handeling responsibilities get caught in some illegal, job-driven "get rich quick" schemes. (can't get more specific).

even when my bother-in-law applied for a job with disney (and they offered him the job; he declined because they didn't want to live in central florida), they checked his credit. it was not a job that involved handeling cash, or any kind of investments. it was a creative-type job.

it really is a standard check in most empolyment settings. kind of like a drug screen is standard in most health-related (and some other) occupations.

however, i, too am confused as to why the op was declined a job based off this.

i can see being declined a mortgage (due to income to debt ratio), but it really shouldn't be a big deal for a hospital employer.

did this job have direct cash-handeling responsibilities? (some nurisng postions do -- say, collecting copays). if it did, then it might make some sense.

will you do have to have an income in order to pay your bills. ive had people calling me asking how would i handle this bill that i owe. you know what i tell them give me a job .

[SummerGarden, BSN, MSN, RN]

So you think people who get home loans, have no savings then? They live paycheck by paycheck to pay it off?

Yes, they live check-to-check! Most Americans do not have a savings, which is why many are going bankrupt and losing their homes. It is also one of the reasons parts of the stock market is doing very very poorly right now.

Don't get me wrong some people have money and like to carry debts for some bizarre reason (who cares about credit ratings if you have CASH???), but the MAJORITY of Americans who carry debt have no savings and are living check-to-check.

So, I agree with the above poster that your financial planning is bad because you are being compared to most Americans, not the few. Get rid of the debt (you have the money) and you should see your employment prospects get better.

[rigmedic]

Get rid of the credit card debt ASAP. Debt=Risk. The credit card companies have rigged the game, and the longer you play their game the more likely it is that you will get hurt. If you swim with sharks long enough, you WILL get bitten. Pay them off, and then cut them up.

[Freedom42]

The reason people don't pay off their mortgages is because they are TAX DEDUCTIBLE!!!!!!!! Credit cards and other loans are not. Your employer is doing what many others do. There is an opinion that how you manage your money reflects on how responsible you are. Right or wrong, it's done all the time...even auto insurance companies base your rate on your credit among other things. I would take this issue seriously and pay off some of your debts. This won't be the first potential employer who has a problem with your "plan".

Just to clarify: A mortgage is not tax-deductible. If only it were so! It's only the interest on the mortgage that is tax-deductible. And whether it makes sense to continue paying that interest, instead of paying off your mortgage outright, depends on your interest rate.

[casi, ASN, RN]

The amount of interest you are paying by just paying a minimum is phenominal. he min basically just covers the interest on the credit card. Next time you get a statement look at finance charges tacked on compared to what you are paying monthly.

Let me give you an example from the Visa statement I'm currently looking at. I owe them $56. My minimum payment is $10 and for this cycle I got charged about $8 in interest. So if I pay off just the minimum I'm only paying $2 towards my debt.

[justme1972]

OMG! That is horrible!

However, from an investment standpoint...remember that most home loans are between 6% and 9% and credit cards are between 9% and 23%....if you are carrying balances, then you are paying out the wazoo in interest and aren't "saving" anything...you are still paying the interest annually. If you are only paying the minimum payment, you'll never pay it off.

The interest and property taxes on a house is tax deductable to a large extent..not so with credit cards.

My advice would be to put the money in a money market account, and pay off your creditors in full, monthly...that way, you really are saving money and not spending it in interest.

[Bluehair]

I have never heard of a credit check as a requirement for clearance for employment. As the OP said, you aren't asking them for a loan. It doesn't make sense to me.

Last I heard there was a nursing shortage - sounds like some employers are "shooting themselves in the foot" by denying nurses employment based on a credit check, especially when your score is 780.

Weird.

[Jo Dirt]

You are NOT saving money by paying the minimum each month and putting the rest into savings. The longer you go not paying off these debts the more you will be eaten alive with interest fees. Do the math and figure it out.

You need SERIOUS financial counseling.